To what extent has China been successful in its four modernisation efforts?

Four modernisations which comprised of the modernisation of agriculture,

industry, science and technology, as well as the militaryin the order of
the governments prioritycan be a simple summary of Dengs
overarching goals in his cause of economic reform for China. Although
there are challenges to the four modernisation efforts, China has by far
departed from the state of a backwardness and impoverishment to
become a global economic powerhouse that is more capable of
weathering global economic crises than any of the most advanced
western countries. Hence, this essay seeks to argue that China has largely
been successful in its four modernisation efforts because despite the
deep-seated challenges that have hindered Chinas four modernisation
efforts as well as new ones that have arisen out of it, China has been
highly successful in developing its economy and has time and again made
tremendous economic progress even in the darkest hours of the global
economy.
New challenges brought in by Chinas four modernisations as well as the
worsening of old ones limit its extent of success. China has been plagued
by social ills that are by-products of its four modernisation reforms. Rapid
modernisation of the industry has resulted in serious environmental
degradation detrimental to the health and social stability of China.
Economic modernisation coupled with unequal development has
exacerbated socioeconomic inequalities. Economic reforms have also
accentuated dissents against CCP regime as more political challenges
began to surface. The prevalence and rampancy of corruption that have
arisen out of Chinas economic modernisation are rooted in Chinas
partially reformed economy and absence of genuine political reforms. For
many years, Beijing, for fear of undermining the supremacy ruling party
has lacked the political will to act against top level party officials and this
has encouraged rampant level of corruption in a patron-client structural
relationship. The recent Bo Xilai saga is a good example: Credibility of
governing institutions was critically undermined; public resentment was
fuelled; massive economic distortions were resulted; and needlessly,
CCPs legitimacy was challenged. As such, challenges brought in by
Chinas four modernisations as well as the worsening of old ones limit its
extent of success.
However, chinas four modernisation efforts have been successful in
bringing in high growth rates by exposed the agriculture, industries,
science and technology, and the military to the forces of modernisation
despite the presence of political challenges that have hindered the
opening up of China. Under industrial modernisation, Dengs socialism
with Chinese characteristic justified the establishment of capitalism
within communist China. Beginning with the establishment of SEZ in
Southeastern Chinese coastal provinces, more trading cities subsequently
flourished along the Banks of the Yangtze River to facilitate international
commerce into mainland China. Chinese leaders toured the more

developed countries to invite foreign capitalist firms to invest and set up

businesses in China. Industrial parks and preferential treatments are in
place to attract foreign capital and know-how. As such, Chinas four
modernisations is the very cradle that brought China the economic
prosperity it enjoys today.
Despite four modernisation efforts, Chinas economy is plagued by the
mammoth and often inefficient SOEs. Four modernisations endorse the
privatisation of the SOEs. Yet even today, SOEs have been receiving bulk
of the governmental attention, support and resources for their
development. The SOEs employ millions and are not transparent in their
operations. Unprofitable SOEs are also responsible for the accumulation of
bad debts held by the state banks. The SOEs and SIEs contributed to more
than half of Chinas GDP growth. They are the corporations that
spearheaded Chinese economic expansion overseas through aggressive
acquisitions and investments. Private enterprises are often excluded from
more large-scale industries such as energy, steel and telecommunications.
As such, the success of four modernisations is limited.
Still, after overcoming political opposition in the government in the early
stage of Chinas reform, Chinas four modernisation efforts have been
successful in privatising Chinas agriculture and industry to raising its
productivity and efficacy. In the agriculture sector, under agricultural
modernisation, the Household Responsibility System was introduced to
encourage greater productivity as peasants could now sell their surplus
crops on the open market. Town Village Enterprises subsequently were
also established so that surplus labour in the countryside could earn extra
income through employment in low-skilled manufacturing industries. By
2008, the government allowed the more profitable farms to enjoy
economies of scale as they could from then lease from the smaller
farmers. Farmers in Yuannan could collaborate with foreign firms such as
Nescafe to cultivate modern cash crops to earn higher revenue. Monetary
incentives were also introduced to improve the processes and productivity
of the SOEs. To make SOEs internationally competitive, they were
restructured and reformed along the managerial model of foreign-owned
multinational corporations. Leaders of the SOEs were better tutored in the
capitalist ways. They were given greater autonomy by the government at
making business decisions. As such, Chinas four modernisation efforts
have been successful as it raised the productivity and efficacy of the
agriculture and industrial sector by privatising some of them, if privatising
all of them was not feasible.
Although four modernisation efforts have liberalised and privatised many
of Chinas industries, Chinas financial system remained centrally-planned
and underdeveloped. Despite progresses made in the modernisation of
Chinas financial system, held back by old socialist attitudes, the four
major state banks remained under strong state control and are inflexible
to the needs of the market. Even up till today, China does not have a
transparent and developed bond and stock market. Value of the Chinese

currency is still determined by the government. Chinese banking system

continues to discriminate against private households, local small and
medium enterprises, thus irresponsive to market needs. Financial
resources are concentrated in the state-owned enterprises traditionally
affiliated with the state banks. As such, four modernisations are limited in
its success.
Nevertheless, Chinas four modernisation efforts made Chinese economy
increasingly market oriented and less state-controlled over time in spite of
the overwhelming presence of staunch communist politicians in the
government in the early economic development of China and before the
economy becomes market-oriented, it is just a matter of time. Under
economic modernisation, monetary economy is established with the
abolishment of coupons by the 1980s as the renminbi became the
nations legal tender. Retail and service sector began to flourish
throughout China as the government began to deregulate the market.
Trade volume and flow of investments between China and other countries
expanded rapidly after the 1980s. More people set up their own
businesses to provide goods and services that are in domestic and foreign
demand. Salaries are determined by job performances and most
occupational benefits reminiscence of the old socialist system has been
withdrawn. As such, four modernisations have still overall been successful
in transiting the economy to a more market-oriented and less statecontrolled to rake in high economic growth.
While four modernisations focuses on the integration of China into the
global economy, market reorientation toward a consumption-based
economy today make China less dependent on the global economy and
thus may signify that it has outlived its effectiveness, thereby limiting the
extent of its success. China has the natural advantages in export-oriented
manufacturing given its low labour costs, strong governmental support,
adaptable and innovative enterprising businesses. However, this makes
China vulnerable to global economic crises. As demand for Chinese
exports from the developed western countries faltered during global
economic crises, growth slowed. As such, the reorientation of Chinas
economy toward a consumption-based economy limits the success of four
modernisations that was supposed to make China more integrated to the
global economy.
Nonetheless, due Chinas four modernisation efforts, China has been
integrated deeply with the global economy contrary to the previous
isolationist position and will continue to be so even as China reorients
itself towards a consumption-based economy. Firstly, attempts at
progressing toward a consumption-based economy have been fraught
with obstacles such as wealth disparity, underdeveloped financial
institutions and low social spending. Together with the entrance into WTO
which was a momentous development in Chinas economic modernisation,
China has formally become a member of the international market
economy. Subsequent trade treaties signed with other countries such as

the bilateral and regional free trade agreements, further integrate the
Chinese with the global system. By 2009, China has become the third
largest exporter in the world. The vast Chinese market continues to take
in foreign investors and businesses. Chinese investments are also sought
after by the developing and resource-rich nations. As such, four
modernisations were still largely successful.
In conclusion, four modernisations have indeed brought about new
challenges, worsened old ones and were inadequate at reforming Chinas
economy in some area. However, it has still been able to develop Chinas
economy, causing it being able to consistently sustain high economic
growth even when other developed countries failed to do so. Hence,
Chinas four modernisation efforts have been largely successful.